(AMC), Gamestop Corporation (NYSE:GME) – Wall Street fund managers track retail traders on social media and message boards
Retail trader behavior is becoming a key focus of Wall Street fund managers as smart money now tracks social media posts to determine crowd sentiment.
- The Wall Street Journal reports that 85% of hedge funds and 42% of asset managers now monitor retail chat rooms, according to a Bloomberg Intelligence survey.
- JPMorgan Chase & Co (NYSE: JPM) introduced a new data product in September 2021 that shows which stocks individual investors are likely to buy and sell.
- Around 50 clients, including some of the biggest asset and quantitative managers, are testing the product, which includes data on sectors and stocks being talked about on social media.
- JMP Securities estimates that 15 million Americans opened brokerage accounts in 2021. Their power was seen when retail traders on the r/WallStreetBets subreddit banded together to drive up stock prices like GameStop Corp. (NYSE: GME) and AMC Entertainment Holdings Inc. (NYSE: AMC).
- An analysis by Ihor Dusaniwsky, at S3 Partners, found that only seven stocks in the US market had short interest of 40% or more at the end of 2021. That was down from 40 stocks in early January 2020 and 19 stocks in January. 2021.
- “At the back of every hedge fund’s mind is, ‘I don’t want to be on the wrong side of a meme stock game,'” Dusaniwsky told the Journal.
Photo: Courtesy of Udo Kempen on Flickr
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